Stillwater Urges Shareholders to Vote the WHITE Proxy FOR Stillwater’s
Exposes Lack of Experience and Qualifications of Clinton Group Nominees
Highlights Clinton Group’s Value Destroying Track Record
BILLINGS, Mont. -- April 08, 2013
Stillwater Mining Company (NYSE:SWC) (TSX:SWC.U) (“Stillwater” or the
“Company”) today announced that it has sent a letter to shareholders in
connection with the Company's 2013 Annual Shareholders Meeting, which will be
held on May 2, 2013.
The letter details Stillwater’s many concerns with the Clinton Group, a 1.3%
shareholder, and its attempt to take control of the Company. In particular,
the Clinton Group offers no new strategy or detailed operating plan and has
shown through its communications that it does not understand the Company’s
business. Several of Clinton Group’s misguided demands, the company believes,
will be value-destructive for Stillwater’s shareholders.
The letter exposes the fact that Clinton Group’s director nominees are not
qualified to oversee a U.S. public company, nor are they qualified to oversee
complex, PGM underground mining operations. Certain individuals also have
questionable professional backgrounds and educational representations. The
letter goes on to detail Clinton Group’s poor investment track record and the
significant value they have destroyed at other companies.
All shareholders of record as of March 6, 2013 are entitled to vote at the
2013 Annual Shareholders Meeting. Stillwater encourages all shareholders to
carefully review its definitive proxy filing and other materials and vote only
their WHITE proxy card. For more
information about Stillwater’s 2013 Annual Shareholders Meeting, please visit
The full text of the letter follows:
April 8, 2013
Dear Fellow Shareholder:
ENSURE THE CONTINUED SUCCESS OF STILLWATER –
PLEASE VOTE THE WHITE PROXY CARD TODAY
Since 2001, we have transformed Stillwater from a single low-volume, high-cost
mine into an integrated set of highly competitive, industry-leading PGM
operations and core growth prospects based in Montana. We have managed to
accomplish this despite extreme PGM price volatility, critical auto contract
expirations, ever deeper and receding mine operations and an ore body weighted
3.4:1 toward lower-priced palladium. Today, the outlook for Stillwater is
better than it has ever been and the Company is well positioned to take
advantage of extremely favorable PGM market fundamentals at a time when many
of our peers face significant operational and financial challenges.
DO NOT HALT THIS POSITIVE MOMENTUM – CLINTON GROUP IS NOT THE ANSWER
We value the opinions of our investors and welcome feedback on a variety of
topics, as we have displayed openly in our meetings with many of you over the
years. However, in the case of Clinton Group, a hedge fund that only recently
acquired just 1.3% of the Company’s outstanding shares, we believe they have a
self-serving agenda, do not understand the Company’s business, and pose a
significant threat to the value of your investment in Stillwater. They offer
no new strategy or detailed operating plan and have made several misguided
demands that will, in our view, be value-destructive for Stillwater’s
CLINTON GROUP IS A SHORT-TERM FOCUSED TRADER WITH A POOR TRACK RECORD AND NO
According to public filings, Clinton Group’s investment experience in the
mining industry includes only a few limited forays, none of them PGM-focused,
with an average holding period that suggests a significant short-term bias.
Further, despite Clinton Group’s promises, its record in “unlocking value for
shareholders” is abysmal.
*Only holds its investments for nine months on average in all of its
threatened or pursued proxy contests
*Failed to create value in five out of seven situations where it gained
*Averaged a 33% depreciation in value in the seven situations in which they
procured board seats
*Had no publicly disclosed PGM investments prior to Stillwater
Indeed, Clinton Group failed to create value for itself or other shareholders
in four out of six situations where it gained board seats. At Digital
Generation, Clinton Group lost 41% for shareholders; at Dillard’s, Clinton
Group lost 77% for shareholders; Lenox Group lost an astounding 99% of
shareholder value during Clinton Group’s activism; and Nutrisystem has dropped
26% since Clinton Group’s involvement.^1
CLINTON GROUP HAS PUT FORTH A SLATE OF UNQUALIFIED NOMINEES
WITH QUESTIONABLE SKILLS AND BACKGROUNDS
Equally as worrisome as Clinton Group’s poor track record of value creation
are the issues associated with their slate of hand-picked nominees. Clinton
Group’s slate is not qualified to oversee a U.S. public company, nor are they
qualified to oversee complex, PGM underground mining operations.
*Seven of Clinton Group's eight nominees have NO direct PGM experience
*Seven of Clinton Group's eight nominees have NEVER served on a U.S. public
Furthermore, each of their nominees brings to bear significant concerns
regarding the adequacy of their qualifications and experience, which in turn
raises serious doubts as to the suitability of Clinton’s hand-picked slate.
Brian Schweitzer – It is peculiar that Dr. Schweitzer was a staunch supporter
of Stillwater while he was in office, but then only weeks after he stepped
down, aligned himself with the Clinton Group seeking to disrupt our progress
and growth in Montana. Furthermore, we find it unconscionable that he can
repeatedly make inaccurate and inflammatory statements regarding Stillwater’s
focus in, and commitment to, its Montana operations and still purport to be a
viable nominee for Stillwater’s shareholders. Dr. Schweitzer would have you
believe we have taken our eye off Montana. Nothing could be further from the
truth. (1) 98% of our workforce is based in Montana, (2) in conjunction with
our expanding operations, we have grown our Montana-based workforce 21% in the
past two years and plan to increase it another 9% by the end of 2013, and (3)
we continue to allocate the overwhelming majority of our capital expenditures
to our Montana operations and growth projects (i.e., 87% of our 2013 capital
Charles R. Engles – Dr. Engles abruptly tendered his resignation as Chairman
and CEO of Stillwater in 1997 at a time when the Company struggled as a
low-volume, high-cost producer with no clear strategy for future growth or
development in Montana. We believe our shareholders should question Dr. Engles
regarding his track record at Stillwater and ask him to publicly discuss the
reasons for his abrupt resignation. Since then, Dr. Engles has been involved
in a number of failed ventures with questionable oversight, including Sundance
Homes, Catalytic Solutions and Cutanix Corporation. Furthermore, Dr Engles has
been out of the mining industry in any meaningful capacity for 15-plus years.
John DeMichiei – Mr. DeMichiei may be a coal mining professional, but he has
no PGM or related hard-rock mining experience and his track record at coal
producer Signal Peak Energy raises serious questions and concerns. Under his
leadership, Signal Peak has had significant labor, safety and environmental
issues. For example, Mr. DeMichiei took coercive action and threatened
employees with loss of wages and benefits when they joined a union. Signal
Peak’s Bull Mountain mine reported seven roof falls between 2009 and 2012,
compared to just one between 2003 and 2008, before Signal Peak took over the
mine. Furthermore, members of the Montana Board of Environmental Review have
recently cited “revisiting violations by Signal Peak on a repeated basis” and
Signal Peak’s “historic” environmental issues. Separately, there appear to be
material inconsistencies in Mr. DeMichiei’s academic and employment record. He
claims to have a Bachelor of Science in Mining Engineering from the University
of Pittsburgh. The University of Pittsburgh could only confirm attendance for
one year, with no record of a degree. Mr. DeMichiei also claims to have a
Masters of Business Administration from American University. American
University was only able to confirm a Masters of Public Administration.
Michael McMullen – Mr. McMullen’s primary experience appears to be limited to
early-stage, non-producing and highly-speculative exploration and development
companies. He has no leadership experience at a sizeable producing precious
metals mining company like Stillwater. Furthermore, for some reason, he has
excluded in his bio his involvement in West African Resources, which is an
early stage gold explorer in Burkina Faso.
Patrice E. Merrin – Ms. Merrin was previously banned from the U.S. for a
period of time as a result of violations of the Helms-Burton Act. Ms. Merrin
engaged in the violations while an executive at the Sherritt Corporation. The
Sherritt Corporation jointly owns a zinc mine in Cuba with the Cuban
government, which had seized the mine from Freeport McMoRan, a U.S. company,
after Fidel Castro came to power.
Michael McNamara – Mr. McNamara has less than 10 years of work experience as a
financial analyst, has been unemployed for the last three years, and has had
no mining, corporate management or public company board experience whatsoever.
Mr. McNamara is extremely unqualified to serve on any public company Board.
Seth E. Gardner – Mr. Gardner is another board nominee with extremely limited
experience. He does not appear to have any corporate management experience of
any kind and his board experience is limited to Cerberus portfolio companies.
Gregory P. Taxin – Mr. Taxin has no prior investment experience in the PGM
industry and little experience in mining. Furthermore, his track record and
qualifications as an investor are poor, aside from taking aim at a wide
variety of companies in various industries and very publicly announcing change
is needed. We believe this is reflective of his short-term focus on investing
and lack of understanding the fundamental drivers of businesses he invests in.
Ultimately, his poor track record in other activist situations – where in many
cases he caused significant value erosion due to ineffective and misguided
recommendations – speaks for itself.
CLINTON GROUP CONTINUES TO SHOW A LACK OF UNDERSTANDING OF
STILLWATER’S HISTORY AND BUSINESS
CLINTON GROUP SAYS THE FACTS
*The Stillwater-Norilsk transaction was a
marketing transaction, not a control
*Norilsk’s passive management role is made
abundantly clear in the publicly
Clinton Group would like filed shareholder agreement that governed
Stillwater the relationship.
shareholders to believe that *Norilsk had no control over the operations
Norilsk or budget of the Company other
had operating control over than appointing Directors, fully
Stillwater. independent of Norilsk, to constitute a
majority of the Board.
*Importantly, several excellent independent
directors Norilsk had nominated
continue to serve on Stillwater’s Board
*The convertible debt offering was
necessary, well-structured and low-cost.
*$167 million has already been used to
Clinton Group criticizes the retire existing debt, and the remaining
convertible debt offering $220 million positions the Company to
that aggressively pursue Montana
Stillwater announced in growth regardless of PGM pricing
October of volatility.
2012. *The offering provides Stillwater a
low-coupon piece of paper, the principal
of which can ultimately be repaid in cash,
i.e. no shareholder dilution.
STILLWATER’S BOARD OF DIRECTORS ARE HIGHLY QUALIFIED
AND SERVING YOUR BEST INTERESTS
Stillwater’s skilled and experienced director nominees are clearly best suited
to leverage the positive turnaround in palladium’s fundamentals and continue
building Stillwater as a leading PGM company. Our Directors have experience in
PGM, open-pit and underground mining, finance, operations, and project
development. The Board has proactively pursued candidates with complementing
existing skillsets on the Board and recently added two new Directors. They are
committed to the development of the company’s PGM operations and growth
programs and creating value for ALL Stillwater shareholders. More detail on
each of our Directors is available in our 2013 proxy statement.
THE CHOICE IS CLEAR – VOTE FOR THE STILLWATER NOMINEES
ON THE WHITE PROXY CARD TODAY
Protect the value of your investment. To support your Company’s nominees, who
are committed to looking after the best interests of ALL Stillwater
shareholders, please use your WHITE proxy card to vote TODAY—by telephone,
over the Internet, or by signing, dating and returning the WHITE proxy card in
the postage-paid envelope provided. You are urged to discard any green proxy
card sent to you by Clinton Group. Even a protest vote against Clinton Group’s
nominees on Clinton Group’s green proxy card will cancel any previous proxy
submitted by you in favor of Stillwater. Please vote only the WHITE proxy
We appreciate all the positive feedback we have received from our
shareholders, and thank you for your support.
Francis R. McAllister
Chairman and Chief Executive Officer
Your Vote Is Important, No Matter How Many Or How Few Shares You Own
If you would like to obtain copies of the Company’s proxy materials or have
questions about how to vote your shares, or need additional assistance, please
contact the firm assisting us in the solicitation of proxies:
INNISFREE M&A INCORPORATED
Shareholders Call Toll-Free: (877) 825-8906
Banks and Brokers Call Collect: (212) 750-5833
We urge you NOT to vote using any green proxy card sent to you by
the Clinton Group, as doing so will revoke your vote on the WHITE proxy card.
^1 Source: 13D Monitor, Capital IQ, Company filings, and FactSet as of
4/1/2013. At Nutrisystem, proxy fight was avoided based on a settlement
reached to add an independent director. Returns calculated from first public
filing to best available exit date or 4/1/13.
About Stillwater Mining Company
Stillwater Mining Company is the only U.S. producer of palladium and platinum
and is the largest primary producer of platinum group metals outside of South
Africa and the Russian Federation. The Company’s shares are traded on the New
York Stock Exchange under the symbol SWC and on the Toronto Stock Exchange
under the symbol SWC.U. Information on Stillwater Mining Company can be found
at its website: www.stillwatermining.com.
Some statements contained in this news release are forward-looking statements
within the meaning of Section 27A of the Securities Act of 1933, as amended,
and Section 21E of the Securities Exchange Act of 1934, as amended, and,
therefore, involve uncertainties or risks that could cause actual results to
differ materially. These statements may contain words such as "believes,"
"anticipates," "plans," "expects," "intends," “projects”, "estimates,"
"forecast," "guidance," or similar expressions. These statements are not
guarantees of the Company's future performance and are subject to risks,
uncertainties and other important factors that could cause our actual
performance or achievements to differ materially from those expressed or
implied by these forward-looking statements. Such statements include, but are
not limited to, comments regarding expansion plans, costs, grade, production
and recovery rates, permitting, financing needs, the terms of future credit
facilities and capital expenditures, increases in processing capacity, cost
reduction measures, safety, timing for engineering studies, and environmental
permitting and compliance, litigation, labor matters and the palladium and
platinum market. Additional information regarding factors, which could cause
results to differ materially from management's expectations, is found in the
section entitled "Risk Factors" in the Company's 2011 Annual Report on Form
10-K and in subsequent filings with the United States Securities & Exchange
Commission. The Company intends that the forward-looking statements contained
herein be subject to the above-mentioned statutory safe harbors. Investors are
cautioned not to rely on forward-looking statements. The Company disclaims any
obligation to update forward-looking statements.
Mike Beckstead, 406-373-8971
Innisfree M&A Incorporated
Arthur Crozier / Jennifer Shotwell / Scott Winter
Sard Verbinnen & Co
Dan Gagnier / Michael Henson
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